Incentive programs are typically offered by sponsoring companies to promote the sales of their products or services, or to improve the performance of their employees. Employees participating in incentive programs usually receive credits that can be accumulated and exchanged for merchandise in award catalogs, or for travel awards. The selling prices of individual items of merchandise are therefore stated as credit values instead of in dollar amounts.
Stating prices in terms of credit values is meant to deter program participants from comparing the cost of individual items of merchandise found in award catalogs with their prices at retail. Because the incentive companies running the incentive programs provide significant services (such as consulting, program design, home delivery of merchandise, etc.), the prices of merchandise in the award catalogs are typically higher than those featured by retail stores. Participants, not recognizing the costs necessary to administer the incentive program, may believe that the incentive companies as well as the program sponsors are benefitting unjustly by marking up prices higher than retail prices. Unfortunately, participants are nearly always able to deduce the cost of credits, by comparing item-for-item costs with retail prices of identical items. This price-perception problem is a significant disadvantage to such incentive programs.
Incentive programs in which participants are awarded credits are typically administered in one of two ways. First, credits may be tracked by a computerized bank account reward system. Such a computerized system permits reporting to the participants of the number of credits that were awarded at certain periods during the program, and advising the participants how many more credits remain (i.e., unused credits). Each participant typically has a "personal bank account" into which credits are automatically deposited. Participants usually order awards by calling a toll-free number.
Computerized bank account reward systems, however, are expensive to administer. Every month during which an incentive program is running, the sponsor of the program typically must pay the incentive company for administering the program. Furthermore, at the end of the incentive program period, the credits earned by the participants are lost if they have not been already redeemed for awards. Both of these aspects of computerized bank account reward systems are significant disadvantages.
A second manner in which credits in an incentive program may be issued is through the use of certificates. In a certificate incentive program system, credits are mailed to the participant in the form of certificates. Each particular certificate has a credit value (e.g., one, five or ten credits for a given certificate). When a participant has received enough certificates to receive an award, the participant mails in the certificates to redeem them for the award. Certificates, however, are frequently unwieldy to redeem, and add delay into the award redemption process. Mailing the certificates in for redemption forces the program participant to wait even longer to receive an award, because of the time required for the certificates to reach the redemption center through the mail.
There is a need, therefore, for a computerized incentive program system that overcomes all the above-described disadvantages. That is, there is a need for a computerized incentive program system that awards credits to program participants but which overcomes the price-perception problem encountered in such programs, while also overcoming the disadvantages of the bank account systems and certificate systems used to administer the programs.